Monday, August 23, 2010

Drive north on Peachtree Road and Peachtree Industrial Boulevard through Brookhaven, Chamblee, Doraville and into Dunwoody and the view is startling. Shopping centers are empty like the ghost towns of the Wild West.

The CoStar Group, a national real estate analysis firm, says the vacancy rates of retail, shopping centers and offices in North DeKalb are at catastrophic levels when you compare them to the national average. With so many empty store fronts, why would county officials push so hard to use our tax dollars for a supersized mixed-use project at the site of the former GM plant in Doraville?

Consider this:

-In the North DeKalb zip codes 30319, 30338, 30340, 30341, 30346 and 30360, the vacancy rate for shopping centers is 23 percent compared to 14 percent in DeKalb County as a whole and 10 percent in the City of Atlanta.

- The vacancy rate for North DeKalb office buildings is 24 percent compared to 18 percent in the county overall and 20 percent in the City of Atlanta.

- Retail vacancy rates are 17 percent in those zip codes, 11 percent in DeKalb overall, and 9 percent in Atlanta, according to CoStar.

The county’s elected officials are considering using a special allocation of $36 million in federal stimulus bonds on the 165-acre GM site with visions of creating another Atlantic Station. These bonds come with a high price tag to the taxpayers. DeKalb officials would use the stimulus bonds as a $36 million “gift” to an out-of-state developer, New Broad Street of Florida.

Worse yet, county taxpayers would have to pay the principal and a majority of the interest on these bonds. It’s very likely that means higher property taxes for you and me because the county doesn’t otherwise have the money to make the payments.

In ordinary times, the developer wouldn’t have to rely on county taxpayers. There would be more private investment to help finance the project. But these are no ordinary times. We’re in the midst of the worst commercial real estate market in memory. Private investors don’t want to provide the financing for an overly ambitious mixed-use project consisting of shopping, apartments and offices. The county wants the taxpayers to step in and do what private investors won’t do: bear the risks of this project.

If a new restaurant, retail shop or gas station, for example, wants to open for business, investors take the risk whether it prospers or fails. The same should be true for this project. DeKalb taxpayers are not a bank. They are not in the business of providing corporate welfare to jump start a project the private sector would never finance.

This is the most ambitious project we’ve ever seen county officials attempt to tackle, and it comes during a deep recession. It is not the taxpayers’ job to finance the next Atlantic Station and add to the already glutted market a new supply of retail and commercial space.

The definition of insanity, according to Albert Einstein, is doing the same thing over and over and expecting different results. We should heed the lessons of the “real estate bubble” and steer clear of risking taxpayer funds for further overdevelopment. After the bubble has burst, don’t use our tax dollars to create another bubble!

There are two final things to consider:

1. The GM site ultimately will be redeveloped if the county does not intervene. It’s arguably the most valuable parcel of available commercial property in the county. It’s on a major highway (I-285), a major north-south artery (Peachtree Industrial), and a MARTA station. In better economic times, something that private investors and market forces will support will be built there. I’m confident of that.

2. These particular stimulus bonds are supposed to be used for public infrastructure projects, not for private development. When used properly, they are a cheaper way of financing these projects. The county already has a list of infrastructure needs a mile long, not the least of which is the water and sewer system upgrades that they plan to fund with massive increases in our water bills. The bonds could be used to defray those costs. They also could be used for projects such as street repairs, new sidewalks, intersection upgrades, and parks.

Commissioner Elaine Boyer has pledged to vote against it. I encourage you to contact the other six county commissioners (Rader, Johnson, Barnes-Sutton, May, Gannon, and Stokes) and urge them to vote “no” as well. In particular, Commissioner Jeff Rader appears not to have taken a position as of yet. You can find the commissioners’ telephone numbers and e-mail addresses by clicking here.

Funny how Burrell Ellis can find taxpayer money to give to a private developer on a losing cause, but can't find the money to pay police officers for holidays they work. Labor Day is just a few days away. Then comes November.

I have worked with the Economic Development for the last decade and have found them to be a colossal pain in the ass.Hiding under the CEO's office as irreplaceable but non-productive in their mission of economic growth and stimulous in DeKalb commercial development. I think they have brought in two successful projects in 10 years bringing in about 100 jobs while wasting 30 million in funding and providing 30 jobs to the politically connected and unproductive. Economic Development is a target rich environment for any reporter willing to investigate.

Apparently none of the DeKalb politicians have ever studied any management theories. One of the first things you learn is happy employees = productive employees. Giving the employees what they need to get the job done goes farther than pay only. If the County is looking to invest $35 million in tax payer money, then the wise thing to do would be to invest in the County employees, specifically public safety. Instead, these knuckleheads want to gamble on a project where there is no guarantee from the investor. Since when should tax payer money be used to buy property FOR a private business??? Then again, investing in employees is not a savvy vote-buying scheme.

In these hard economic times place the gambling issue before the voters of this state and it will pass. Then Open up a "mixed use" casino & tourism center and turn Atlanta (and DeKalb) into the Las Vegas of the south. You even have a small airport nearby to support its growth. Think of the tax revenues and secondary jobs it would produce. If you did this then all of Atlanta and north Georgia would live and breathe again and we would all benefit. You have all those dollars spent all over the southeast in Biloxi, Pearl River, Shorter, Cherokee, and New Orleans etc anyway. Why not have folks send them here. And for those who think that it will bring "vice & crime" into the area, look around you and tell me what you already see! Just a thought from an old retired Dekalb Police Officer.

The deal just got voted down. To gain some insight into this, look at Ellis official bio on the county website. Take note of the law firm he is a partner at, Epstein Becker Green. Now take note of what law firm was to handle the legal work on this project, which would go into the millions, Epstein Becker Green. Lastly, take a look at CEO's bio and see what his specialty in his law practice is. Real estate development law.

The GM project is at the wrong time and the wrong place. The wrong time is the current recession, the wrong place is north DeKalb.

The developers don't understand DeKalb politics. North DeKalb is aggressively ignored by DeKalb government because DeKalb rulers know who lives in N. DeKalb, only rich white people! (If you exclude the huge Hispanic and Asian population)

This project was a bummer from the beginning. Raising local taxes even minimally to support the redevelopment of rich white N. DeKalb is not a happening thing in DeKalb. Not only that, it was just a bad deal for DeKalb county government and citizens accepting most of the financial risk and exposure. If the project was a good risk then the developer would of found the financial backing for the entire project. As the deal stood, the county was accepting most of the risk while the developer made all the profit.

This commentary was well written. How can we afford to build new developments when we have so many vacant and empty developments in such close range. It reminds me of what happens to malls and strip-malls when newer and larger developments open down the street or in some cases next door.

We used to have our office on PIB back in 2007 and our office park (we were in the Gwinnett portion that faces the Dekalb portion of the former Sonny's and QT), our office park was begging tenants to come in and ditto for the ones next door.

Jimmy Carter is still blighted, Johns Creek is congested and PIB has empty office parks and shopping centers. Sonny's BBQ even left so what makes Dekalb think this was the magic bullet. The numbers never added up.

Well, Doraville PD can go back to writing their tickets as their economic stimulus package for their portion of PIB.

I appreciate Rep. Jacobs commentary. BUT the truth of the matter is. .. Rep. Jacobs added language to HB203 that ALLOWS DeKalb County to use the stimulus bonds to purchase real estate and enter into a public private partnership. DeKalb hired lobbyists and sent representatives to the Gold Dome to make this happen and have bragged about their success with the "Jacobs Amendment". Perhaps Rep. Jacobs did not understand at the time the impact to taxpayers, perhaps the bigger goal was to ensure D'woody received their parks and fire station at fire sale prices.